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If most of your assets are denominated in one or two of the most
widely held currencies, it’s time to be thinking about ways to
hedge that exposure and diversify into assets denominated in or
connected to currencies that aren’t about to be threatened by
massive, potentially inflationary money printing that risk
killing purchasing power.

Want proof? We need only look at what’s happened in the first
three days of this week.

Here are some highlights of the past days, paraphrased,
summarized, or quoted from seekingalpha.com’s Global &
FX Market Currents from May 21 to 23.

3. Even EZ-wide deposit guarantee plan may not halt the Club Med
bank run because depositor fear is less bank failure risk and
more redenomination risk

4. China may announce stimulus actions in the near future,
reports official Xinhua News Agency

May 22

5. Jeremy Siegel: ECB’s best hope of saving EMU is to trash the
currency upon which it is built. A devalued EUR will bring some
relief to periphery by boosting trade& pumping more inflation
into German economy – a small price to pay to save the union. – A
PRICE TO BE PAID BY ALL THOSE WITH SAVINGS PORTFOLIOS IN EUR,
JEREMY!

6. Speaking to reporters on the release of an IMF report urging
the U.K. to print more money, agency head Lagarde calls for
eurobonds.

8. China to fast-track approvals for infrastructure projects to
combat an economic slowdown, according to the state-backed China
Securities Journal.

May 23

9. Dow Jones: Italy’s Mario Monti has joined France’s Hollande
advocates eurobonds. If so, he would join Spain’s Rajoy who has
also offered guarded support for same and establish a solid bloc
to counterbalance German opposition to jointly issued bonds.
Given the limited support that German, Dutch, Finnish, and other
funding country tax payers would be willing to offer, we suspect
this debt would printed away.

10. Eurogroup Working Group (EWG): Each EZ nation must prepare a
contingency plan should Greece leave EMU. This is announcement is
the first public admission of the possibility by an official EU
body. Indeed, such talk was considered taboo
for fear of leaks and ensuing panic. However with even the Greek
PM admitting to the possibility, the topic is out in the open
Among the elements to consider are what support the EU/IMF should
give. With taxpayers of both EU funding nations and the US (IMF’s
chief paymaster) unlikely to be supportive, and the US in an
election year, we suspect the funds will be printed rather than
allocated from other programs or from spending cuts.

11. Bank of Japan maintains monetary policy, leaving rates in the
0-0.1% band, keeping asset purchases level at a total of ¥70T
($880B). Analysts expect an increase in asset purchases to come
soon. This means in essence more Yen printing to fund purchases
of Japan bonds to keep their price up and yield (and so Japanese
interest rates) low.

Of course, these items are just from the past three days. There
are more reasons, and more currencies, likely to face the threat
of diluted purchasing power through excessive money printing that
quietly taxes savers to fund spenders.

12. It’s well known that the Reserve Bank of Australia is in
easing mode, and that the Fed is ready to begin more quantitative
easing if needed.

13. If the EU crisis starts to overheat, expect the Fed to take
further measures to make more cash available to ease EU banking
liquidity. Of course, the real cause of the EU’s crisis isn’t
liquidity, its actual solvency. The short term liquidity crunch
is just a symptom of the world refusing to lend to it because so
many EU banks and governments may already be technically
insolvent. Still, the Fed is likely to do as it did last year and
at least ease liquidity problems in Europe to buy more time to
avoid a likely market panic and collapse.

It’s possible that widespread money printing may help avoid
recessions – but it’s far more likely that it will kill
ultimately reduce (possibly severely) the purchasing power of the
above mentioned currencies.

Yes, the so called coming “fiscal cliff” of an end to tax cuts
and certain spending programs may reduce the monetary expansion
in the US, but remember, this is an election year. It’s unlikely
any politician will want to hit voters’ wallets before the
November elections. We believe talk of fiscal responsibility will
outweigh any real action on it.

The key lesson here is that we all must diversify our liquid
assets – here’s the guide to the easiest, safest way to do
it, The Sensible Guide To Forex. It shows how you
can easily achieve this, without opening accounts all over the
world, or engaging in the high risk, demanding kind of short term
trading typically associated with forex.

We don’t have to accept whatever diluted currency Bernanke,
Draghi, King, and other central bank heads decide to serve up. We
can vote with our feet and wallets and move get more exposure to
assets of nations that respect our rights to keep what we’ve
earned and saved without imposing the stealth tax of excessive
money supply.

Does anyone know which firm(s) dominate the market for printing
presses used to print currencies? The coming years should be
great for those who manufacture, sell, and service the hardware
behind the wave of loose monetary policy.

Disclosure: no positions or plans to open new ones in any asset
mentioned above in the coming days.